Madonna dumps record companies, signs with concert promoter

More and more artists are striking innovative deals to sell their music — and leaving the traditional record industry contract behind. The Wall Street Journalreports that once Madonna's contract with Warner Music is up, she will link up with concert-promoter Live Nation. While not as revolutionary as Radiohead's pay-what-you-want plan, or Prince's free-music-with-newspaper deal, Live Nation is a concert production company, not a record label. Madonna's deal will bring album production and distribution, concerts, merchandise and publicity under one company.

In an attempt to counter Live Nation's concert/album/merchandise bid, Warner got Barry Diller's IAC/InterActiveCorp involved. IAC owns Ticketmaster, whose ticketing deal with Live Nation expired in August. Even so, the money was too much for Madonna to refuse. Under the new deal, Madonna will collect $120 million over 10 years plus 90 percent of tour revenue.

Madonna's albums will still be distributed through normal retail channels. Live Nation doesn't have a distribution arm, so it will contract, instead, with another label. Also unusual for the industry is a term under which ownership of the three albums to be recorded will revert to Madonna after a certain period of time.

Other big groups will be watching Madonna, Nine Inch Nails and Radiohead to see how their ventures work out. The fact that players like Live Nation are getting in the business tells us that middlemen will continue to play a role in connecting musicians with listeners. It just won't be the same middlemen as before.